Confidence in a low-carbon economy: John Ashton

The UK's special representative for climate change, John Ashton, explains how low-carbon choices will make Europe more competitive, prosperous and secure

By Pavel Antonov

Having just celebrated the 50th anniversary of the Rome Treaty, is Europe forgetting why it should be a leader in global sustainability?

In the middle of the second half of the 20th century, it was so evidently true that the sources of threats to European prosperity and security, as well as the economic opportunities, lay primarily within geographical Europe. The case now is that the main threats and opportunities lie outside our geographical frontiers.

For example, the economic debate about globalisation in its current form is largely about competition from countries like China. We also have issues like climate change and terrorism, which simply cannot be dealt with through an exclusively European decision-making process.

Today's threats and opportunities needs to be engaged at the source. A lot of that engagement has to be at European level, and it needs to be an engagement of scale, an engagement on the part of what has become the world's largest single market. If we are to have a chance of accelerating China's transition to a low-carbon economy, it has to be an effort undertaken as Europe, rather than as individual member states. Harnessing the power of the world's largest single market to the world's fastest growing economy would create a transformational economic force felt globally.

I think that we need to develop a more outward-looking debate about Europe. And it needs to be a more self-confident debate. I think we've fallen into a mood of anxiety. Threats of terrorism, of climate change, of losing your job to competition from outside- all of these drive anxiety. Because of the anxiety that dominates our politics at the moment, we tend to underestimate our strengths, which lie in the social and institutional capital that's embodied in the European project. Europe worries about losing jobs to China, but China worries about why it lacks the social safety nets that Europe has.

Speaking as a climate change ambassador, have you observed any positive changes in the European mindset?

There are some positive signs. The outcome of the European Council in March was extremely encouraging. It accomplished two things. Until now, the centre of gravity of elite opinion in Europe has been: "Climate change is, of course, a problem, but we need to be careful because strong policies to respond to it will undermine competitiveness."

What's happening now is the emergence of a new political synthesis, which says: "We need to be leading the global transition to a low-carbon economy if we hope to remain competitive."

This also comes at a time when there is real concern about the widening gap between European governments and elites on one hand [...] and European citizens on the other. Many people have difficulty seeing why the European project is necessary in order to address the needs that they have. One thing is very clear: that both climate security and energy security are causing a great deal of concern to European citizens. Polling evidence tends to say that [European citizens] would like to see governments do more to address energy and climate.

So here you have Europe responding to that challenge — Europe making a proposition to citizens which addresses these concerns — and offering to build a low-carbon economy before any other major economy builds it. This is a very significant shift of political gravity among European leaders.

You seem optimistic about Europe's ability to accomplish the transition to a low-carbon economy.

I am being quite measured in what I say. Nobody should suggest that it's easy to build a low-carbon economy. Big political questions will need to be resolved.

We're talking about at least three fundamental changes within the structure of the economy: the way we produce and consume energy; the way we achieve mobility; and the way we use land.

Such deep economic restructuring will give rise to enormous distributional challenges. There will be a lot of arguments where one interest group says: "You're asking us to bear too much of the pain, and you should put more of the pain onto other sectors." The bigger question, however, is: What is the distribution of effort between tax payers, consumers and shareholders?

I'm not trying to be optimistic or pessimistic, just simply pointing out what we have to do.

Does it worry you that the EU's newest members could very likely put up a lot of resistance to such changes?

Yes, that is a concern. I know that, among the more sceptical voices in the EU on the package that came out from the European Council, many were from Central and Eastern European countries.

A note of humility here: My knowledge of these countries is very limited, so I hesitate to pontificate in these circumstances. These countries are undergoing very far-reaching transitions, with political consequences which need to be dealt with and absorbed. If you say to a society which is already making a difficult transition: "Here's another transition you have to make!" it causes some anxiety and it's hard to build support.

Cohesion is something that Europe has been pretty good at. We need to build the low-carbon idea into how we address those issues. Next year, there will be a review of the European budget, and part of that will look at structural funds. It's an obvious question: How do you apply structural funds in a way that will deliver jobs, growth, rising living standards and faster transition to low carbon, particularly to those countries most in need of structural funds? That's a very relevant question in terms of what we can do collectively to make it easier for CEE countries to be part of this transition.

What do you think Europeans need to be prepared to do without in order to build a low-carbon economy?

It's never very good politics to say to people that they should give things up, but we're now beginning to understand the picture of low-carbon economy in a lot more detail. The conclusion of the recent review by my colleague, Sir Nicholas Stern, was very clear: There will be some cost, but it won't be overwhelming. The political problems of that cost will be disproportionately great because there will be distributional issues, and distributional politics is always very difficult. But, against the background of a healthy and attractive prospect of welfare and prosperity, I do not think this is predominantly about cost and sacrifice, I think it's much more about opportunity. There are huge opportunities in building a low-carbon economy.

The Independent has run on its front page a list of '50 reasons to love the EU' — and reason number 16 is: "Europe is helping to save the planet with regulatory cuts of CO2." With prosperity, the common market and consumer rights ranked third through fifth, doesn't it seem that there needs to be a bit more desire for addressing climate change?

The language of this question is very revealing. Let's deconstruct it. To "save the planet" is an environmental proposition. I think the most fundamental thing about a successful response to climate change is building a sense that this is not primarily about the environment. This is about prosperity and security.

We won't be secure, and we won't be prosperous unless we are effective in responding to climate change. It's not about the planet; it's about us.

And then [The Independent] mentions "regulatory cuts in CO₂." Of course, you have to have an economy which is less carbon intensive. But to describe it in that way is misleading. It sounds like marginal changes to one aspect to the economy. It is not! It's a fundamental reform of the economy. So I would say a very different thing: "Building a low-carbon economy."

How tough do you need to be when arguing this at international negotiations?

First of all, this is not about negotiations. Once you get to the point of negotiations, it's too late. This is about trying a political foundation for a certain direction in society.

I will give you an example: One of the things that we need to do as we drive this transition is to release a considerable amount of public investment to accelerate the deployment of low-carbon technologies. For very understandable reasons, public investment is very difficult. You can only get that if politics allows you to get it, and we need that political permission; otherwise we won't make the transition fast enough. This was another message of the Stern Review: One dimension of climate change work will certainly be public investment.

Structural funds are public investment. So the issue is: How do you focus them, and what do you get in return? There's huge opportunity in the fact that CEE countries are already undergoing a transition and that a lot of new infrastructure is being built. When you build infrastructure, you lock a certain structure of your economy into place that will last for generations.

[Then it's a question of] what kind of economy you want to build: high-carbon or low-carbon infrastructure? Do you want an infrastructure which encourages a lot of short-haul air travel, which is going to be very emissions intensive, or one which favours train travel, which is less emissions intensive but requires investment? Choices are made by default if you don't think about them, if you don't consider the alternatives. In many cases, we've built economies without making those choices because we didn't articulate the alternatives. We need to articulate the alternatives in this case.

What is the biggest obstacle to building a low-carbon economy?

Lack of confidence. We need to look right across the economic relationship with China and with our other major partners, and to say how we can use these relationships to amplify the signal that we initiated at the Spring Council. That will make us and our partners able to build low-carbon societies faster than we otherwise would.

At the moment, there's a real question of whether we have that confidence to do that. So, those of us who want to see the transition need to be asking ourselves how to build that confidence. How can we build a vocation which is outward-looking and self-confident, and therefore capable of bearing the weight of these policy structures that we need to build to drive the transition?

What do you believe is the first step to be made?

One thing I would focus very much on is the European budget. We know we have to modernise the budget anyway, and we've agreed to have a review of it next year. Part of that review should explain how we can have a budget for energy and climate security in the same way that we had a budget for food security 60 years ago. We need a budget for today's problems, rather than a budget for yesterday's problems.